While the Ugandan economy proceeds developing, the property market will grow. Many of the property sector buyers however will probably not need time to deal with the properties themselves on a day to day basis. They will more and more rely on property management firms. Florida Property Management
Before considering property management in Uganda as an investment option, the investor needs to however be aware of the following:
one particular. Legal hurdles.
You should know that in Uganda, because of the poor land tenure system, combined with administrative issues and corruption, property purchase and construction is often fraught with legal troubles. It is far from uncommon for individuals to obtain illegitimate planning permits for construction of properties in say gazetted zones like wetlands and forest reserves. Subsequently correcting this irregularity has often resulted in long sluggish legal processes and the master and so the property director often lose revenues during the non occupancy of the disputed property.
Property management organizations like any other businesses need to exhibit a top degree of integrity for prospective clients to handover the properties. In Uganda there have been some high-profile court cases regarding property managers, including one of the leading property management firm whose managing overseer conned a potential buyer of advance monies paid. There was an important reputation loss. If you are considering investing in this sector, you should therefore ensure you conserve the high standards of professional strength such as separating customer and office monies as well as maintaining good accounting records, otherwise your reputation can certainly be dinged up.
3. The property market bubble.
Whilst the global credit crisis continues disappointing property values in places including the USA and the UK, In Uganda this is not particularly being felt for a plethora of reasons. In the commercial sector, malls and shopping centres continue to emerge in the capital city Kampala as well as suburbia to cater for the growing middle class and increasing population therefore of rural- urban migration which is currently estimated at 3%-5% per annum.
On the residential sector outstanding to a general debt of housing there is always demand for property and as such the property values keep growing. The shortage of casing is generally because just like many cities across sub Saharan Africa, rural-urban migration to Kampala has resulted in significant populace growth not matched by construction and so triggering a shortage of housing, especially for the low and middle level income earners.
The main likelihood of the property bubble in Uganda would arise from political instability which would lead to collapse of the sector.
The competition for property management in this sector is as follows:
At the pinnacle end of the market are international property management firm affiliates like Dark night Frank. In addition there are ISO certified companies like Amalgamated Property Sales staff (APS) as well as large and reputable property management companies such as Crane Management services which is under the Ruparelia Group of companies.
In the lower end of industry are property brokers who also double as even landlords for their clients. These typically cater for low-income earners’ housing.
Found in my model, I endorse that the property management investor will need to develop their niche as follows:
1) A company that is an internet marketer or franchise holder of an international property management firm. In Uganda, as far as I know, international property management organizations like CBRE and Ornement have no local portrayal except for Knight Outspoken. There is therefore an opportunity for the trader to ensure that their firm gets affiliation to these international firms. This kind of will give them instant brand recognition and the perceived quality and reputation already associated with the international firms. Additionally they will benefit from the referrals if clients of the international firm seek a local representative in Uganda. I can expect that this affiliation has written for the success of Knight Frank Uganda.
2) A firm that has its own agents on its payroll. Broker agents in Uganda usually action independent of any determined, are semi illiterate and lack sufficient seed money to deal with potential clients. If the stable therefore guarantees them an everyday allowance say of shs. 10, 000 to look after meals, transport and communication for their activities, they are likely to send future business to the firm, particularly if they are not able to handle it themselves.